Does the defense have an obligation to fund an MSA?
From the sidelines I have watched an online debate among fellow NAMSAP (National Assoc of Medicare Set-Aside Professionals) members about whether the defense has an obligation to fund a Medicare Set-Aside (MSA) on a settlement involving a Medicare beneficiary. There have been credible arguments made for both sides of the debate. Rather than answer the question I would like to share a legal point of reference and guidance from CMS and then revisit the question.
42 CFR 411.46 (b)(2)
(2) If a settlement appears to represent an attempt to shift to Medicare the responsibility for payment of medical expenses for the treatment of a work-related condition, the settlement will not be recognized. For example, if the parties to a settlement attempt to maximize the amount of disability benefits paid under workers' compensation by releasing the workers' compensation carrier from liability for medical expenses for a particular condition even though the facts show that the condition is work-related, Medicare will not pay for treatment of that condition.
From WCMSA home page: ps://www.cms.gov/Medicare/Coordination-of-Benefits-and-Recovery/Workers-Compensation-Medicare-Set-Aside-Arrangements/WCMSA-Overview.html
"All parties in a workers’ compensation case have significant responsibilities under the Medicare Secondary Payer (MSP) laws to protect Medicare’s interests when resolving cases that include future medical expenses. The recommended method to protect Medicare’s interests is a WCMSA."
Okay, if a settlement is not recognized by Medicare because it runs afoul of 411.46 (b) (2) then that would arguably make any payments by Medicare for post-settlement treatment of the injury "conditional payments". And if the settlement is not recognized by Medicare then the primary payer's (i.e. self-insured or insurance carrier) responsibility to reimburse Medicare for those conditional payments arguably never ceased.
And the guidance quoted from CMS does not say only the claimant has the responsibility to protect Medicare's interests when settling cases that involve future medical expenses. It says "all parties" have that responsibility and it goes on to state "the recommended method to protect their interests is a WCMSA".
So what do you think? Does the defense have an obligation to fund an MSA? At least based on what we know today it is the injured worker/Medicare beneficiary who stands to "lose" the most if Medicare feels their interests were not adequately protected at the time of settlement. It is they who would have no Medicare coverage for their injury and no MSA to rely on for future payment of the injury related treatment.
There are reports of Medicare recently denying coverage of post-settlement treatment involving liability settlements with no MSA funding. It is unlikely that CMS would treat a WC settlement with future medical expectations but no MSA funding any differently.
So I'll let the lawyers debate whether the defense has a legal obligation to fund an MSA when resolving cases that include future medical expenses. I would argue the defense has a moral obligation to fund an MSA on those settlements.
Managing Partner MAPS Medical
8yThanks to all for weighing in. Let me state again this article was targeted for workers comp. The references I made to 411.46(b)(2) and the WCMSA home page are specific to WC. This article was never intended to provide an opinion on liabilty claims/MSAs.
Retired at Self-Employed
8yThe defense has NO obligation to fund an MSA in third party liability cases. Moral or otherwise. If the plaintiff wishes to fund a so-called LMSA, then let them do so out of the settlement proceeds. The defense’s only obligation is to ensure “conditional payments” incurred prior to the settlement are reimbursed to Medicare or suffer the consequences. If CMS is aware of the settlement, and chooses not to recognize the settlement, their only choice is to withhold future Medicare items and services. And to David Farber’s point, I am not aware of any situation where this has happened. I will let David and MARC know if/when I become aware of one. As for workers’ comp, again, the consequences of failing to “adequately consider” (and I reject the notion there is an affirmative duty to protect Medicare) Medicare’s future interests again falls squarely on the Medicare beneficiary. If Medicare is aware of the settlement (which should a presumptive yes if the settlement was reported under MMSEA), then any payments by Medicare AFTER the settlement are mistaken payment; and cannot be “conditional payments” by Medicare’s own definition. The MSP is silent on what happens when Medicare makes a mistaken payments.
West Point Grad, Veteran, Traveler, Diver, Pilot, Entrepreneur, Dad,Strategizing for a Second Act, Founder of Milestone
8yI agree with David Ransin. MSA are only required in Comp cases in which the future medical is being resolved. There are no instances nationally of s medicare beneficiary being penalized(denial of payment for medical in which the treatment is medicare allowable
Managing Partner MAPS Medical
8yDavid: I will defer to John V. Cattie, Jr. regarding your concern about Medicare denial of post-settlement treatment on a liability case with no MSA. I believe John was contacted by the plaintiff atty involved on the case. I don't know if John is able to share any details with you . But John is well versed and respected on the subject of liabilty MSAs. I encourage you to contact John on the subject of liability MSAs. This article was targeted at WCMSAs.
Owner, Ransin Injury Law
8yJeff, Do you have any specific cases to report to support this statement ?: "There are reports of Medicare recently denying coverage of post-settlement treatment involving liability settlements with no MSA funding. " If you do, please email them to me at david@ransin.com and if not, would you please publicly retract your statement ? finally, *IF* LMSA's were required, at what rate would the payments be made, full "retail" or at the Medicare discounted rate ?? David Ransin